The New Jersey Division of Investment, the entity that invests the state’s pension assets, has committed $300 million to be invested in the U.S. apartment sector.
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The New Jersey Division of Investment has formed a $303m (€267.8m) separate account relationship with TGM Associates to invest in US apartments.
The pension fund allocated $300m for its 99% ownership of the account, in which TGM will hold $3m (1%).
The account, the pension fund’s first with TGM, will pursue a non-core strategy.
New Jersey is currently under-allocated to the apartment sector, with 16% of its portfolio invested in the property type.
Average multifamily exposure across the NCREIF-ODCE Fund Index is around 25%.
TGM’s investments in apartments for previous separate account relationships was a decisive factor for New Jersey.
A separate account for a large public fund delivered a 10.5% net IRR and a 1.9x multiple of invested capital since inception.
The Division of Investment managed $81.22 billion in pension assets as of July 2014.